I have seen too many people fighting battles, wasting resources and impoverishing the end results, just for the pleasure of winning. In other words, engaging in “lost” battles. And what are “lost” battles? You are asking. Well, lost battles are all of those situations that one cannot change and that are not critical to achieve the end goal. Imagine the following situation, you are implementing a project and suddenly something that puts the project at risk happens. How do you react? Would you prefer to fight to revert the situation although you have to spend more resources; or would you prefer to “lose” that battle by not engaging in reverse it but instead use your time and resources to find an alternative way so that you can be able to deliver alike results with no additional “pain” (higher costs, miss deadlines, etc) ? As a manager, I have seen too many situations where people fought just for the sake of winning, ending up with a missed Goal and higher costs. I also know that not engaging in a battle it is not as straightforward as we would like it to be. Securing the “war” it is much more important than winning a battle, unless that battle is critical to winning the “war”. Thinking in the long-term and focusing on the big pictur are, at least for me, “right” moves if you want to achieve goals, otherwise you may be wasting resources and increasing the likelihood of missing the goal.
Doing business domestically is not the same as going abroad, new challenges and issues will arise and they can easily break your business if not controlled. Thus, it is of the utmost importance that you fully understand what is at stake and which aspects will differ from your domestic business. By listing and analysing this new challenges and differences you will be protecting yourself from unexpected costs and risks that may lead you to losses rather than profits. Sorry for me being blunt, but along the times I have seen too many amazing products and businesses failing to succeed due to this kind of mistakes – bad forecast of costs and revenues; fail to master the documents and licenses needed, payment methods, and sales conditions used in international trade.Therefore, I am here today to introduce you a checklist of domains you should cover while doing your business case for your export operation.
In order to do it in a systematized way and saving time, I like to divide the checklist into four main areas and although there is no special order or preference, I prefer to start with the Management and HR, followed by Marketing, Operations, and end with Finance – as you can see in the figure.
Management and HR you should assess everything impacting the way you manage and organise your business domestically: extra time to start-up the export operation, new organizational needs, new decision-making processes, and new activities that you will need to implement. IP rights along with special licenses are aspects underestimated that can easily put your business in a tough position. Human Resources are also critical, assessing the key personnel and special training needs for this new venture is therefore crucial. You should start asking if the actual team is enough in quantity, skills and competences, and what kind of training they, and you, will need.
Marketing, in this area you should assess everything related to the market and the differences of going to an international market. Exporting is highly challenging because you need to find new markets and customers, and therefore it is critical to have information and data. Assessing the kind of Market Intelligence you will need, in oder to comprehend how the market operates, the customers’ needs and habits, and the local way of doing business is critical. Along with that you will also need to understand if your Product needs to be changed in order to penetrate the market. The Trade Marketing – sales materials, promotion campaigns, point-of-sale merchandising, and other materials and strategies – will probably need to be customised for the market. Along with this it is also important to understand that the trade marketing strategies and tactics will also need to be tailor-made for the market and region, and that may bring new needs. Cultural distance is a highly critical variable for any export business, understanding the market you are exporting its cultural differences it is crucial. I can tell you that this is one of the most underestimated aspects by the companies that can easily spoil the whole operation.
The third block of your export challenges checklist is the Operations side, in here I put everything related to executing on the field the business plan. Meaning, managing your production capacity and other special product customizations in time and linking it to an international supply chain that efficiently delivers your goods to the market, designing a distribution plan (distributors, reps, agents,etc) that meets your demands, preparing and handling special documentation and other needed certifications and licenses in order to be able to export and sometimes import your products into the new markets (depending on your distribution choice), and the needs for a tight project management and control of all the different variables involved when exporting. By project management I mean everything going from the moment you sell to the moment you deliver and collect the payment. A lot of small firms underestimate the importance of handling the part of collecting and sometimes delivering correctly what means not get paid in time or at all. As you know with the Incoterms is easier to be on the same page with your buyer concerning sales and payment conditions, and therefore is important to choose the correct Incoterm to use in the contract along with the correct execution otherwise it does not work.
The Financial aspects are the last but not the least export challenges in your checklist. Exporting means extra costs (trade marketing new needs, credit costs, transport costs, etc) different credit and payment methods, and extra risks (exchange rate, payment methods, default of payment, scams, etc). Thus, It is important that you understand all the changes so that you can have a competitive and profitable operation.
Be aware and prepared, and you will be fine. Good Luck!
No, you do not need to forget your ethics to enter a new market. However, you do need to understand the cultural background of the country you are entering so that you can avoid problems and awkward situations. And do not forget that, if you want to go internationally, being a “cultural illiterate” can jeopardise your business. Though, if you are still asking “why do I need to learn about other cultures if I have a top notch product to offer ?” you are being silly and naive.
Before you enter a new market (country) you need to do a strong cultural analysis including how to do business locally. You should also understand that skipping it it is the same as investing in a new project without a cash flow analysis or a Net Present Value calculation. It is a huge mistake that will cost you lots of money.
I would like to highlight, though, that cultural diversity is highly underestimated when preparing a business plan to go internationally. Companies spend great amounts of money and resources on financial viability studies and exhaustive marketing studies but they normally fail to include a cultural study into the business plan. Therefore, the sooner you acknowledge the cultural and ethic differences the better. Defining an ethical code to operate internationally is rather important while expanding. The code should remain faithful to the company’s vision, believes and social responsibilities, and should include a list of guidelines to help your teams behaving in the field. Ethics is too important not to consider it while operating internationally. Do yourself a favour and include a cultural study and your ethical guidelines in the business plan before deploying your resources on the field. Good luck!
The World is changing fast, and in new directions! How about your own world? Is it changing sufficiently fast to keep up with the “surroundings”? And, what should you do to keep it alive and kicking? Honestly, I do not know! However, what I do know it is that stand still in denial will not help you, you need to keep up with change proactively.
Although I have written before about this subject – being the most recent Backwards or Forward? -, I keep assisting to crucial mistakes, and good companies going out of business. Keeping doing business like you did last century will, sooner than later, putting your company out of the business. Therefore, I insist, innovation, uniqueness, creativity, talent, and diversity are all key words on keeping a company striving and excelling, however, I would like to add alertness, adaptation and adoption to the list; – Please read the article Adopt, Adapt or Adios! by William Powell – The solution passes by working hard, creating new trends, being unique, and taking advantage of what is happening around you. Ignoring or closing your eyes to changes will lead you nowhere, and only make you lose time and competitiveness.
Some ideas! Stimulate brainstorming around trends inside your company, have a special team working on future trends (even if in part-time), and link them strongly with your R&D and Innovation teams, and try out innovative projects. Ah, and do not afraid new technologies, instead use it at your service! Recruit the talent that makes the difference, people with a vision, eager to learn, and open to change.
Although Innovation is everywhere, also a post I once wrote, you will not be able to do it if you keep exaggerating on your skepticism to change and new trends. Please, do yourself a favor, stay wired to the real world, be inquisitive, and follow what is happening out there.
How about brand your company while hiring talent? I face recruiting as an excellent opportunity to communicate and interact with potential talents, but also with potential and present consumers. Therefore, it is a moment of great opportunity to improve, or create, brand awareness. As a (internal) recruiter you are also brand ambassador, someone that can communicate your company’s brand, or brands. Ah, do not forget that when bringing a third party in to handle the recruitment process, you are hiring not only recruiters but also “brand ambassadors”, and that can harm your brand if not carefully done. Honestly, I must say that too many were the times that while being contacted or contacting a HR department or a third party agency regarding a job ad, I came across with brand damage along the process. Why? Well, I believe that they do not understand what it is at stake, and besides recruiting people and dealing with talent needs, they are not invited nor trained to be official “brand ambassadors”. In order to have the whole company motivated and aware of their brand duties, you need to create a culture of cross-section sharing and participation among the company. Being the bottom line here the need for a strong synergy between the corporate strategy and marketing department and the HR department. Obviously, I believe that you can extend this to the rest the departments in your company.
Recruiting people is key to a company, firstly because it deals with bringing talented people in and increase the company’s competitiveness. Secondly, because it creates a pool of talent to keep an eye on regarding future needs. And thirdly, it allows to communicate formal and informally with people that are already interested in your company. Have you ever thought about how many people a recruiter interacts with while recruiting for your company? Yes, I know! A huge figure, isn’t it? And, how many job ads do they post advertising the company’s needs? Yes, I know, also a non negligible figure! Ah, and if you could use these “non negligible” opportunities to communicate not only your recruiting needs, but also your brand? Wasn’t it amazing! Oh, but you can use them!
I believe you can face this channel (recruiting and talent management) as a strong way of branding your company, and creating awareness and loyalty. Although a lot of aspects of your brand can be communicated, you must always be creative and unique while doing it. Brand is uniqueness, and as a brand ambassador you must communicate accordingly. Therefore, you should work closely with your marketing department to align your message with your company’s brand and marketing strategy. Team work the best the best way of bringing in positive synergies between departments and within a company.
Have you ever though about brand your company through your day-to-day routines of recruiting talent? No? How about give it a try? You will not regret! Good Luck!
I risk saying, everything! Although change is part of life, people keep running away from it, and showing high levels of anxiety and resistance. Why is that so? Well, uncertainty is the answer!
People is highly afraid of uncertainty, and change is all about uncertainty. Unfortunately change can ruin team spirit, impact negatively motivation levels, and risk years of team building. In times of tough competition, and a tight war for talent, having people motivated and working well in teams are a must. I must say that the better companies know how to deal with change, the more prepared they are to face rough times and strong competition.
So, how can anxiety and resistance associated to change be avoided, or at least reduced to manageable levels? My experience tells me that if you are able to reduce uncertainty, you will be able to keep the most adverse effects on the low side. And to reduce uncertainty you need to communicate well with transparency, and show true understanding with all the people involved. By understanding the fears associated with change you will be able to communicate more efficiently avoiding negative behaviors, keeping everybody committed, and on-board.
Reduce uncertainty implies a strong understanding, and clear communication creating a strong sense of community and commitment. However, I must confess that there is no such thing as “the right approach” or “solution”, and that each case needs its own approach. Therefore, if you are in charge of change you need to show true understanding toward the people involved and be able to perform different styles of communication accordingly to the situation at-hand.
Key words in Change management, uncertainty, anxiety, fears, resistance, understanding, communication and transparency. Avoid the first four through the latest three. Your leadership style, the situation at-hand, and your team’s maturity will influence the way you face change. Ah, there is no right or wrong approach, only trial and error and a sensibility! Good luck, though!
Along the years to many were the occasions where I knew beforehand that no matter what the conditions were – team readiness and competences, or corporate culture and organization -, my objectives were impossible to achieve. Why? Because they had been set in such incomprehensible and unrealistic terms that they were completely impossible to achieve. Therefore, I keep wondering, how can unreachable objectives help companies being competitive? Well, I strongly believe that they CANNOT!
Why setting objectives? Answering to this question must be the very first thing to do, immediately followed by answering, “Why these (objectives) and not any other?”.
Objectives must be aligned with the business strategy, execution plan, available resources, and time span. If companies do not take any of this into account, how can they set objectives that make sense? The more randomly objectives are set the more impossible are to achieve them.
So what do you need to know, or have, in order to be able to set relevant and coherent objectives? Objectives must bring value into the company not only in the short but also in the medium and long run. Objectives must be always aligned with business strategy, major goals, and an execution plan. Objectives should not be limited to financial, profit or cash related indicators, they must translate also the company’s “health” in other areas such as operations, sales profitability, innovation, competitiveness, readiness and flexibility toward future challenges, people development and talent management, suppliers quality and capabilities, or customers satisfaction and loyalty. In order to have a strong, complete and cross-section set of objectives and KPIs (key performance indicators) several methodologies can be used and built. I am particularly fond of the balanced scorecard approach along with a strong mapping of the strategic areas that should be impacting or being impacted by the business strategy. This strategic mapping help defining the strategic objectives that must be monitoring, after that is key to define the way of measuring them and set a target/deadline to be achieved. The important aspect to highlight here is that what ever approach one takes, it must take into account the following aspects: business strategy; strategy execution; top/bottom and bottom/up analysis; cross-section KPIs (include more than just financial, profit and cash related KPIs); KPIs must be set by area only after the integrated analysis (strategic mapping, top/bottom, and bottom/up analysis); resources available and needed; talent and human resources needed; reporting and control system (that helps mitigating risks, taking decisions, and learning).
I see objectives as key to competitiveness! If one does not have a set of KPIs and targets to be achieved, how can this person know if it is working well, evolving, and adding value? In my perspective, well defined objectives are a strong motivational tool. How can companies stay in the market and be competitive if they do not measure their achievements and set targets to be achieved? However, objectives should not be the end goal of a company, but rather a way of knowing if the company is in the right path toward its business strategy and vision. Obviously, business strategy or vision are changeable, though they should be set for a horizon of 4 to 5 years, and not yearly, and be more than just a profit statement. A multi-annual execution plan accommodating objectives for the period must be designed before going setting objectives. Objectives are a too important tool to be misused! Objectives must be a strong motivation booster rather than a motivation killer!